Household Finances – Page 5 – Digital Finance Analytics (DFA) Blog

CPI: Making Sense Of The Senseless??

The ABS released the latest monthly CPI data today, and it reports that Inflation is still sticky in Australia, and accelerated faster than expected for a third straight month in May, sending the currency higher as traders boosted bets that the Reserve Bank will resume raising interest rates at its next meeting. The report comes after RBA Governor Michele Bullock restated last week that the rate-setting board isn’t ruling out a rate hike after leaving the benchmark at a 12-year high of 4.35%.

Wednesday’s figures suggest inflation is running ahead of the RBA’s forecast for underlying inflation to ease to 3.8 per cent in the June quarter. That said, the monthly numbers are at best partial, compared with the more complete quarterly data which provides a fuller picture of inflation.

In truth, for many households real inflation is much higher than the statistics suggest, with continued massive lifts in insurance costs for example, but Warren Hogan may end up being right, with further rate hikes a clear threat if the Q2 quarterly inflation print confirms the uptrend.

This is a mess, created by taking rates too low in the first place, saying they would stay low into 2024, then not returning them to normal rates soon enough, meantime luring many into property are extended prices and big loans. The route out of the years of policy failure will be difficult for many, though somehow policy makers and politicians seem to be able to find someone else to blame. How about some real accountability?

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

Is A 5% Cash Rate For Australia On The Cards?

Bullock was clear, we need more data, there are risks to the upside from sticky inflation, but employment is also an important factor, given their dual mandate.

Just remember folks, the RBA at 4.35% is significantly below several other Central Banks, including the Bank of England, which held rates on Thursday at 5.25%, despite inflation falling to 2% last month, Bank of Canada which cut rates by 0.25% to 4.75% and New Zealand’s Reserve Bank holding rates at 5.5%, despite driving the economy there into recession.

Which begs the question, has the RBA done enough on rates to squeeze inflation out of the economy in Australia, despite being lower the peers, mainly because in Australia a greater proportion of mortgages are linked to variable rates than other countries. Economists are divided, with Leith still holding the next cut will be down, as unemployment rises.

But writing on Monday, before the RBA decided to hold rates on Tuesday, Economist Warren Hogan, at the more bullish end of commentators on RBA rates, wrote in the AFR that the flow of data since the last meeting in early May made it a very close call to hold off on further tightening.

The narrow path is still attainable, but it increasingly looks like we will need to get rates up closer to 5 per cent to stay on it.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog

Is A 5% Cash Rate For Australia On The Cards?

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One In Eight Mortgage Borrowers “Extend And Pretend”!

Struggling homeowners are increasingly hitting the pricey reset button on their loans in the hope of dragging down their monthly repayments.
It’s adding years to the length of their loans and potentially hundreds of thousands of dollars in interest costs.

A recent Finder.com.au survey revealed one in eight mortgage holders polled revealed they had extended their home loan to lower their repayments over the last year.

In a trend described as “borrowers stuck in mortgage quicksand”, about half of those who had extended their loans had added more than five years to the life of the debt.

This would result in much higher interest costs over the lifetime of the loan, despite cheaper monthly repayment bills in the short-term, Finder revealed.

“Even a small increase in the length of a loan term can add up to big differences in interest over the life of a home loan.”

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

Digital Finance Analytics (DFA) Blog

One In Eight Mortgage Borrowers “Extend And Pretend”!

00:00 / 00:06:30

One In Eight Mortgage Borrowers “Extend And Pretend”!

A recent Finder.com.au survey revealed one in eight mortgage holders polled revealed they had extended their home loan to lower their repayments over the last year.

In a trend described as “borrowers stuck in mortgage quicksand”, about half of those who had extended their loans had added more than five years to the life of the debt.

This would result in much higher interest costs over the lifetime of the loan, despite cheaper monthly repayment bills in the short-term, Finder revealed.

“Even a small increase in the length of a loan term can add up to big differences in interest over the life of a home loan.”

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

Is A 5% Cash Rate For Australia On The Cards?

As I discussed on my live show, on Tuesday night with Leith van Onselen, the RBA decided to hold the cash rate at 4.35%, but there were signs of a more hawkish tone from the meeting notes, and the subsequent press conference (which I might add is becoming less useful each time thanks to weak questions supporting weak answers, come on MSM do your job….)
Bullock was clear, we need more data, there are risks to the upside from sticky inflation, but employment is also an important factor, given their dual mandate.

The narrow path is still attainable, but it increasingly looks like we will need to get rates up closer to 5 per cent to stay on it.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

It’s A Taxing Time, But Make Sure You Do It Right! : With Allan Mason

I caught up with accountant, Allan Mason, who was Kerry Packer’s accountant and is the best-selling author of “Tax Secrets of The Rich”. As the tax year looms, its important to take charge of your tax affairs, and we discuss some of the main issues to consider.

https://nla.gov.au/nla.obj-3019211844/view

Note this is not specific tax advice, just a general conversation.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog

It’s A Taxing Time, But Make Sure You Do It Right! : With Allan Mason

00:00 / 00:26:40

The Kiwi Economy On A Knife Edge… As More Leave!

In this show we will look at some of the recent data relating to the New Zealand economy, which is sitting in a high interest rate, recessionary condition, as the Reserve Bank of New Zealand wrangles inflation towards its targets. We saw a significant rise in people leaving the country, with New Zealand Citizens voting with their feet!

So, we will look at the latest on property prices, retail spending and the latest inflation and migration updates. Overall, things remain very tough, though inflation while remaining sticky, is easing slowly.

So, standing back, clearly the New Zealand economy is not out of the woods yet, but the Reserve Bank of New Zealand’s approach of lifting rates higher than Australia does appear to be pushing inflation in the right direction. The uptick in exits from New Zealand suggests perhaps that some are deciding to jump ship, because households are clearly feeing the pressures. And recent policy changes will likely continue to reduce net overseas migration, with potentially significant impacts on the jobs market, and demand for property.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog

The Kiwi Economy On A Knife Edge… As More Leave!

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